New Jersey Physicians Report Divergent Outlooks for Their Practices, Many Considering Changes in Structure

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Brach Eichler’s Annual New Jersey Health Care Monitor Reveals Mounting Financial Pressures, ACA and ACO Confusion

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“The health care environment is a dynamic one in New Jersey, characterized by tremendous competition and an increasingly complex regulatory environment,” said John D. Fanburg, managing member and head of the health care practice at Brach Eichler.

When asked about their outlook concerning their medical practices in the coming year, New Jersey physicians appear to be evenly divided among favorable, unfavorable and neutral perspectives, according to Brach Eichler’s 2013 New Jersey Health Care Monitor. Brach Eichler conducted the annual survey among nearly 150 physicians statewide, including solo practitioners, members of a group practice or employees of a health care facility, in July 2013.

The Brach Eichler survey revealed that:

  •     More than 26% said their outlook concerning their medical practice was favorable;
  •     Nearly 36% said they felt neutral, and
  •     Nearly 38% held an unfavorable view.

In spite of their diverse outlook, nearly half (45.5%) of the physicians surveyed said they were considering changing their practice structure this year. Specifically, half of all those respondents said they plan to integrate with another health care organization such as another single specialty or multispecialty practice, an individual practice association, a hospital system or a joint venture.

Further:

  •     Another 35.9% said they plan to hire other practitioners;
  •     18.8% said they will contract with a health care facility this year;
  •     15.6% plan to leave their practice to practice in another state;
  •     12.5% said they were leaving their practice to join another practice, and
  •     12.5% said they plan to retire.

These findings are consistent with Brach Eichler’s 2012 New Jersey Health Care Monitor which showed that 44.6% of New Jersey physicians were considering changing their practice structure in 2012.

“The health care environment is a dynamic one in New Jersey, characterized by tremendous competition and an increasingly complex regulatory environment,” said John D. Fanburg, managing member and head of the health care practice at Brach Eichler. “For example, those respondents whose outlook was negative about their practice were quick to cite such reasons as increasing insurance premiums, declining reimbursements, increased competition and declining autonomy as among the most influential factors.

“In fact, more than 63% of respondents confirmed that their reimbursement rates decreased from last year. This has put a great deal of financial pressure on New Jersey physicians who cited the need to reduce expenses, increase cash flow, reduce operational efficiencies, bolster market share and compete more effectively with other organizations that are integrating with partners as reasons for changing their practice structure,” Fanburg explained.

ACA and ACO Confusion

Among those who held an unfavorable outlook of their practice, many cited the Affordable Care Act (“ACA”) as a reason. Further, nearly 62% said that the 2012 election negatively impacted their outlook for their medical practice and more than 53% said that the mandate to purchase health insurance under ACA will actually hurt their medical practice.

According to Joseph Gorrell, a health care partner at Brach Eichler, “There is still quite a bit of misinformation and confusion circulating about ‘Obamacare’ among physicians. For instance, many assume that their patient loads will increase while their reimbursements will continue to decrease. It’s clear that more education is needed about the Act’s implications.”

According to Fanburg, under ACA, reimbursement will actually not decrease, but how physicians seek reimbursement will certainly change. “The system under ACA is geared to promote efficiency and quality; we expect that those physicians that run their practice efficiently and with a focus on quality will do well in this regard.”

The survey also revealed that a relatively small number of physicians (24.1%) have joined an Accountable Care Organization (ACO), and of those that have joined, the vast majority (95.2%) says they have not seen any benefits as a result.

“The truth is, we simply do not know yet whether there are any meaningful benefits associated with joining an ACO or whether we simply have not seen them yet,” explained Fanburg. ACOs are groups of health care providers and hospitals who come together voluntarily to deliver high-quality medical care to Medicare patients, reduce duplication of services, and spend health care dollars more efficiently.

“The New Jersey Health Care Monitor underscores the delicate balance that can be associated with practicing medicine here. While growing their practices and the desire to provide superior patient care are certainly top-of-mind goals for New Jersey physicians, the growing body of both state and federal regulations, coupled with the financial pressures associated with the practice of medicine today, are having a dramatic impact on the healthcare landscape.

“When ‘Obamacare’ finally kicks in in October, then New Jersey’s physicians will be in a better position to make decisions about the strategic direction of their practice,” Fanburg said.

Complete survey results can be found at http://www.bracheichler.com/?p=5539 .

About Brach Eichler LLC

Brach Eichler LLC is a full-service law firm based in Roseland, N.J. With nearly 60 attorneys, the firm is focused in the following practice areas: health care; real estate; litigation; tax, trusts and estates; and business & finance. Brach Eichler attorneys have been recognized by clients and peers alike in Best Lawyers in America, Chambers USA and New Jersey Super Lawyers. Visit http://www.bracheichler.com

Brach Eichler’s health care practice offers an array of services to clients across the health care field in such areas as physician and hospital contracts; corporate governance and compliance; health care mergers and acquisitions, administrative and judicial litigation; and state and federal regulatory advice. Clients reflect a cross-section of the health care industry, including large physician groups, individual practitioners, hospitals and hospital systems, medical staff organizations, physician specialty societies, health care trade associations, from long-term care facilities, home health agencies, and patients and providers seeking insurance coverage and proper reimbursement. The Chambers USA Guide to America's Leading Lawyers for Business included Brach Eichler as having among the five leading health care law practices in New Jersey.
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Nina Dietrich
Nina Dietrich LLC
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